Brazilian real

January 20th, 2014 The Real

The real is the present-day currency of Brazil. Its sign is R$ and its ISO code is BRL. It is subdivided into 100 centavos (“hundredths”). The modern real was introduced in 1994 as part of the Plano Real, a substantial monetary reform package that aimed to put an end to three decades of rampant inflation. At the time it was meant to have approximately fixed 1:1 exchange rate with the United States dollar. It suffered a sudden devaluation to a rate of about 2:1 in 1999, reached almost 4:1 in 2002, then partly recovered and has been approximately 2:1 since 2006. The exchange rate as of November 24, 2013 is BRL 2.28 to USD 1.00.

In Portuguese the word real means both “royal” and “real”. The name of the historic real derived from the first sense. The name of the modern currency is generally understood to refer both to the historic unit and to the second sense.[citation needed]

The dollar-like sign in the currency’s symbol (both historic and modern), and in all the other past Brazilian currencies, is officially written with two vertical strokes rather than one. However Unicode considers the difference to be only a matter of font design, and does not have a separate code for the two-stroked version.

The modern real (plural reais) was introduced on July 1, 1994, during the presidency of Itamar Franco, when Fernando Henrique Cardoso was the Minister of Finance, as part of a broader plan to stabilize the Brazilian economy, known as the Plano Real. The new currency replaced the short-lived cruzeiro real (CR$). The reform included the demonetization of the cruzeiro real and required a massive banknote replacement.

At its introduction, the real was defined to be equal to 1 unidade real de valor (URV, “real value unit”) a non-circulating currency unit. At the same time the URV was defined to be worth 2750 cruzeiros reais, which was the average exchange rate of the U.S. dollar to the cruzeiro real on that day. As a consequence, the real was worth exactly one U.S. dollar as it was introduced. Combined with all previous currency changes in the country’s history, this reform made the new real equal to 2.75 x 1018 (2.75 quintillions) of Brazil’s original “réis”.